The Rich Are Getting Poorer And Luxury Retailers Are Freaking Out

For the first time in history, rich people are actually getting
poorer, and luxury retailers are freaking out about it.

The average income for the top 5 percent of people fell
from$358,700 in 2006
to $313,298 in
2010,Pam Danziger, president of
luxury research firm Unity Marketing said in a report. That means
that swanky retailers are furiously vying for customers'
discretionary income.

We saw this trend
at work with Burberry, whose shares slid 20 percent after the
retailer reported sales were down. CEO Angela Ahrendts
blamed the trend on the "external environment."

"Because these same consumers are significantly invested in
their high-end lifestyle with income committed to a wide-range of
fixed expenses to maintain that lifestyle, it's in discretionary
spending where they are going to take their cuts. So that
translates into less money to spend each month for clothes, shoes
and handbags, jewelry and home decorative accessories. These
folks have plenty of all that stuff already, so it is the
easiest, most painless way to adjust one's budget when there is
less money coming in each month."

The days of "shop 'til you drop" for the wealthy are long gone,
Danziger said. This means that luxury retailers are working hard
to figure out how to catch consumers' attention.

We checked out some luxury retailers for signs of the
trend:

Nordstrom has started collaborating with
less expensive retailers like British fast-fashion store
Topshop. They're also marketing "key" pieces for fall, basics
like jackets or denim that people could wear for a lot of
occasions.

Saks is offering promotions including a "double points event"
for loyalty program members and free shipping on orders
greater than $150.

Bergdorf Goodman has a bevy of exclusive merchandise for its
111th anniversary, including a $4,000 pair of Christian
Louboutin shoes.

To get the consumer's attention, even the luxury retailers are
working harder than ever.